The Fed Is Using Its Cronies And Lobbyists To Stop Us From Auditing It

It doesn’t come as too much of a surprise that the measure to
audit the Federal Reserve is coming under continuous fire from
the central bank and its cronies. For the first time since
the Federal Reserve was created nearly a century ago, they have
hired an actual lobbyist to pound the pavement on Capitol
Hill. This is a desperate effort to hang on to the
privilege of secrecy and lack of accountability they have enjoyed
for so long. Last week showed they are getting their
money’s worth in the Senate.

At the very last minute on the floor of the Senate, supposed
compromise language was agreed to and substituted in the Sanders
Amendment to the Financial Reform Bill. This language was
acceptable to the administration, committee leadership, and to
the Fed. The trouble is, while it is better than no audit
at all, it guts the spirit of a truly meaningful audit of the
most crucial transactions of the Fed. In fact, rather than
still calling the Sanders Amendment an audit, maybe it should
instead be called more of a disclosure at this point.

The new language of the Sanders Amendment requires a one-time
disclosure from the Fed of 13(3) facilities, foreign currency
swaps and mortgage-backed securities. Basically, their sins
of the past would be revealed and Americans would know more about
who got bailed out by the Fed and under what terms. This
would be good, but its not nearly enough.

Taxpayers are sick and tired of bailing out privileged,
dysfunctional institutions that should be allowed to fail in
order to stop their ability to wreak havoc on our economy.
Perpetuating these corporations at taxpayer expense is not just
wasteful, it is actively harmful. It would be good to know
what went on in the past, but what about accountability in the
future? A one-time disclosure now will not do us a lot of
good down the road when the cycle repeats itself and friends of
the Fed find themselves in trouble again.

More importantly, agreements with foreign central banks are not
touched by the new Sanders Amendment language. At a time
when Greece, Portugal, Spain and other countries are experiencing
dire financial crises and have their hands out to the
international community, we need to know if our Federal Reserve
is at all involved in bailing them out. As weary as we are
of bailing out companies, the American people would not stand for
bailing out entire countries. Our government is wasteful enough
in its own affairs without contributing to the waste of other
countries. Yet the Fed currently has the tools it needs to
do just this, and to do it in secret.

If we cannot take away the Fed’s ability to waste trillions of
taxpayer dollars on failing companies and failing countries, at
the very least, we can take away their ability to do this with no
transparency or accountability to the American people.
While the Sanders Amendment no longer contains a full audit,
Senator David Vitter has introduced an amendment which contains
the Audit the Fed language that passed the House last fall.
The Senate must pass the Vitter amendment for full disclosure and
full accountability going forward.